Protests, tear gas as fuel prices soar in Nigeria
BY OLA AWONIYI | AFP | YAHOO! NEWS | JANUARY 3, 2012
——————————————————————————————————————
Vehicles queue to buy fuel behind a sign post showing the new pump price at a filling station on Lagos - Ibadan highway. Police fired tear gas at protesters in the Nigerian capital Monday as anger mounted after the government ended fuel subsidies, more than doubling petrol prices in the poverty stricken country. (AFP Photo/Pius Utomi Ekpei)
Police fired tear gas at protesters in the Nigerian capital Monday as anger mounted after the government ended fuel subsidies, more than doubling petrol prices in the poverty stricken country.
The move announced Sunday in Africa’s most populous nation and largest oil producer, saw petrol prices rocket to about 140 niara (0.66 euros, $0.96) per litre on Monday from 65 niara, where the price had been artificially held.
Most Nigerians live on less than two dollars a day.
Queues formed Sunday and again on Monday, a public holiday, with drivers hoping to purchase fuel before prices rise further and fearing a strike by tanker drivers will result in a shortage.
In Lagos, the country’s largest city, and in the capital Abuja, an initial rush on petrol stations died out later Monday, but there were fears of what lay ahead Tuesday when Nigerians return from the Christmas holidays.
Police fired tear gas to break up a protest in Abuja, according to video taken by local Channels television and seen by AFP.
The demonstration included former member of parliament Dino Melaye, and the video appeared to show security agents taking him away, with several hundred people present.
Police said they had dispersed people blocking a road, but did not confirm that tear gas was used.
“A group of people whose identities were not known were blocking a public highway, obstructing the movement of vehicles,” said police spokesman Yemi Ajayi. “They were dispersed.”
Melaye had earlier organised the signing of a petition near the capital’s main parade ground, Eagle Square, which armed soldiers and policemen had cordoned off to bar more people from joining the early protest arrivals.
“The essence of this is to mobilise Nigerians to register their displeasure against the satanic increase of the pump price of petroleum products,” Melaye told reporters earlier.
“It is also to kickstart a mass protest that will follow … The battle to fight this is a battle of no retreat, no surrender.”
A fuel attendant fills a tank at a gas station on Lagos' Ibadan highway where new pump prices were implemented. Nigerian police fired tear gas on Monday to break up a protest in the capital Abuja over soaring petrol prices after the government launched a deeply controversial measure to end fuel subsidies.
Protests of several hundred people broke out in Kano, the largest city in Nigeria’s north, with a student leader threatening riots if the decision was not reversed, while the country’s main labour unions warned of mass action.
“We intend to work with other groups to completely paralyse the government and make the country ungovernable,” said Denja Yaqub, assistant secretary general of the Nigeria Labour Congress.
Protest threats in Nigeria have often fizzled out in the past, but the fuel subsidy issue is one of the few that unites much of the vast country, with widespread popular opposition to the move.
Economists and government officials view removing the subsidy as essential to allowing for more spending on the country’s woefully inadequate infrastructure and to ease pressure on its foreign reserves.
Nigerians however see the subsidy as their only benefit from the nation’s oil wealth.
The government says more than $8 billion was spent in 2011 on fuel subsidies.
Nigeria refines very little of its crude despite being a major oil producer and OPEC member, a situation blamed on corruption and mismanagement, forcing the country to import fuel even while it exports crude.
Subsidies were supposed to keep pump prices low even though fuel is imported at market prices, but there have been serious questions over how the subsidy cash has been paid out.
There have been accusations that much of the money goes to corrupt elites. Fuel was also sold above the set price in many areas outside of major cities.
The new policy deregulates the sector, though prices will still have to be in line with a benchmark rate to be posted regularly on the Petroleum Products Pricing Regulatory Agency website. The rate will be in line with market conditions.
President Goodluck Jonathan along with his highly respected central bank chief, Lamido Sanusi, and the finance minister, ex-World Bank managing director Ngozi Okonjo-Iweala, pushed hard for the subsidy removal.
They have argued that it is key to unlocking development in a country that has been unable to provide even sufficient electricity to its population despite its oil wealth.
Years of deeply rooted corruption have resulted in profound distrust of government officials in Nigeria.
SOURCE: http://news.yahoo.com/nigerian-police-fire-tear-gas-break-fuel-protest-175106227.html
——————————————————————————————————————
Fuel subsidy and downstream oil sector deregulation
JANUARY 3, 2012 | BY PUNCH EDITORIAL BOARD
ACED with spirited opposition to the Federal Government’s plan to withdraw subsidy on petrol, President Goodluck Jonathan and his officials have opted for the alarmist theory that Nigeria’s economy will “collapse” unless the subsidy on petroleum products is removed immediately. Finance Minister and Head of the Economic Team, Ngozi Okonjo-Iweala, has warned that Nigeria may be plunged into the type of turmoil currently faced by Greece and other euro-zone countries. Central Bank of Nigeria Governor, Lamido Sanusi, adds that Nigeria will “never” develop unless the subsidies are stopped.
While the government has become so passionate about the subsidy removal, it is silent on the root of the petroleum products crisis and how to resolve it. Okonjo-Iweala argues that the real market price of a litre of petrol today is N139 and that the government “will save over N1 trillion” in 2012 if the products are sold at the so-called market prices. Sanusi revealed that the CBN sold $8 billion in foreign exchange to petroleum products importers in the first 11 months of this year while the government drew down $8 billion for subsidy.
The root of the crisis and the hoopla over subsidy, however, is importation. Nigeria has been trapped in a 30-year-old cycle of petroleum products shortages and price increases simply because it imports almost all its refined petroleum products. The Cable News Network once dismissed Nigeria as “a country that imports what it has in abundance…” The entire world is amazed at the Nigerian paradox: the world’s sixth largest exporter of crude oil that is at the same time, a major importer of refined petroleum products.
Common sense screams out that the solution is to refine part of the 2.4 million barrels per day it produces to meet domestic demand. Why are Jonathan and his ministers not so passionate about local refining as they have been about continuing the practice of massive imports? Subsidy removal will not reduce the over $8 billion of foreign exchange purchased from the CBN to import petroleum products each year. But by achieving self-sufficiency in refining, in Kuwait, a litre of petrol is N30.66, Qatar, N33.12, Saudi Arabia N17.52 and Libya N15.95. Of Nigeria’s four refineries, three (located in Warri and Port Harcourt) are working at below 30 per cent of installed capacity while the one in Kaduna is not working at all.
The plan by the government to bring the refineries back into full operation in 24 months is deceitful. It is simply holding on tenaciously to the four refineries and NNPC’s 22 depots, fuel stations and pipelines in defiance of the elaborate privatisation plan drawn up by the Bureau of Public Enterprises. Besides, the government has placed nigh-impossible hurdles on the path of the 18 firms it granted provisional licences to establish private refineries. According to a former Petroleum Minister, Tam David-West, the second Port Harcourt refinery was built in only two years. Niger Republic, our impoverished neighbour to the north, has just completed a refinery while Gabon and Cote d’Ivoire now export fuel. Ghana is already building another refinery to consummate its new-found oil-producing status. Venezuela has about 14 refineries and refines 1.28millions of the 2 million bpd it produces daily. Saudi Arabia has nine, Brazil 13, Malaysia six and Libya six. Other Arabian Gulf states are investing in new refineries.
Eminent economist, Sam Aluko, asserts that the oil import cabal is working with government insiders to discourage local refining. “As Chairman of the National Economic Intelligence Committee, we found out that, for every shipload of petrol imported, the profit at that time was $110,000. With this type of profit, they (importers) will not allow our refineries to work and will not set up refineries,” he said. Is the oil cartel more powerful than the Nigerian state?
The government should change its strategy in favour of achieving self-sufficiency in domestic refining within three years. It should do this by immediately selling all four refineries; relax the rules and give extraordinary incentives to private operators to build refineries; sell NNPC’s 22 depots, petrol stations and other downstream assets, and prevent NNPC from participating in petroleum products imports completely. The NNPC admits that its 22 depots are mostly comatose. Why hold on to assets you cannot run? The argument that private operators are unwilling to build refineries because of low prices is right only to the extent that the import and subsidy payment system is a monumental and lucrative fraud.
The government should tie multinationals’ continued participation in the upstream to concurrent investment in domestic refining. Once private refineries are up and running, price controls should end and the fraud-ridden Petroleum Products Pricing and Regulatory Agency and Petroleum Equalisation Fund scrapped. Pipelines and Products Marketing Company, the NNPC subsidiary that disastrously runs the refineries, depots and petrol stations should be liquidated.
SOURCE: http://www.punchng.com/editorial/fuel-subsidy-and-downstream-oil-sector-deregulation/
——————————————————————————————————————
Kolade heads subsidy funds panel, Belgore to lead talks with Labour
TUESDAY, 03 JANUARY 2012 | EDITOR | the guardian – nigeria
Christopher Kolade
PRESIDENT Goodluck Ebele Jonathan has set up a high-powered committee headed by a former Chief Justice of Nigeria, Justice Alfa Belgore to meet with organized labour and all other stakeholders with a view to resolving issues that may arise from the removal of the subsidy on petrol.
President Jonathan has similarly appointed Dr. Christopher Kolade as the Chairman of the Subsidy Reinvestment and Empowerment Programme Board, which is to oversee and ensure the effective and timely implementation of projects to be funded with the savings accruing to the Federal Government from subsidy removal. Major-General Mamman Kontagora (rtd.) will serve as Deputy Chairman of the Board.
According to a statement by the Presidency yesterday, the Subsidy Reinvestment and Empowerment Programme Board will also include two representatives of the National Assembly, two representatives of organized labour, one representative of the National Union of Road Transport Workers (NURTW), one representative of the Nigerian Union of Journalists, one representative of Nigerian Women Groups, one representative of Nigerian youth, one representative of civil society organisations, the Coordinating Minister of the Economy/Minister of Finance, the Minister of National Planning, the Minister of Petroleum Resources, the Minister of State for Health, the Special Adviser to the President on Technical Matters, and six other reputable individuals from the six geo-political zones in the country, three of whom will be women.
The statement continues: “The mandate of the Board shall be to oversee the Fund in the petroleum subsidy savings account, and the programme specifically to improve the quality of life of Nigerians in line with the Transformation agenda of Mr. President. The Board will have the following responsibilities:
(a) Determine in liaison with the Ministry of Finance and Ministry of Petroleum Resources, the subsidy savings estimates for each preceding month and ensure that such funds are transferred to the Funds’ Special Account with the Central Bank of Nigeria:
(b) Approve the annual work plans and cash budgets of the various Project Implementation Units (PIUs) within the Ministries, Departments and Agencies (MDAs) and ensure orderly disbursement of funds by the PIUs in order to certify and execute projects;
(c) Monitor and evaluate execution of the funded projects, including periodic Poverty and Social Impact Analyses (PSIA)
(d) Update the President regularly on the programme;
(e) Periodically brief the Executive Council of the Federation on the progress of the programme;
(f) Appoint consulting firms with international reputation to provide technical assistance to the Board in financial and project management;
(g) Appoint external auditors for the fund;
(h) Do such other things as are necessary or incidental to the objective of the Fund or as may be assigned by the Federal Government.”
Members of the Belgore-led committee to meet with organized labour, civil society groups and other stakeholders are: the Chairman of the Governors’ Forum, Governor Rotimi Amaechi of Rivers State, Governor Babangida Aliyu of Niger State, Governor Peter Obi of Anambra State, Governor Adams Oshiomhole of Edo State and Governor Sule Lamido of Jigawa State.
The Committee which is expected to begin its work immediately also includes the Minister of Finance and Coordinating Minister of the Economy, Mrs. Ngozi Okonjo-Iweala, the Minister of Petroleum Resources, Mrs. Diezani Allison-Madueke, the Minister of Labour and Productivity, Chief Emeka Wogu, the Special Adviser to the President on Inter Party Affairs, Senator Ben Obi and Mrs. Ngozi Olajemi.
——————————————————————————————————————
Finally, deregulation begins, petrol may cost up to N144
MONDAY, 02 JANUARY 2012 | FROM COLLINS OLAYINKA (ABUJA), DELE FANIMO, OBIORA ADUBA, ROSELINE OKERE AND SULAIMON SALAU (LAGOS) | THE GUARDIAN – NIGERIA | NEWS - NATIONAL
- TUC denies pact with govt
- NLC blames IMF/World Bank, seeks referendum
- LCCI lists gains of policy
- Labour plans protest, may take Jonathan to ICC
AS Nigerians began the new year with high hopes yesterday, the news they dreaded mostly was delivered: the much-argued deregulation of the downstream sector had begun, meaning that subsidy on petrol had finally been removed.
With this development, the price of a litre of petrol also known as premium motor spirit may rise from N65 to N141.00k, even though the government has not fixed any price in the spirit of deregulation.
The Executive Secretary, Petroleum Products Pricing Regulatory Agency (PPPRA), Reginald Stanley, in a statement yesterday, said that following extensive consultation with stakeholders across the nation, the agency removed the subsidy on Premium Motor Spirit (PMS), in accordance with the powers conferred on it by the law establishing it.
The agency added that by this announcement, the downstream sub-sector of the petroleum industry had been deregulated for PMS, adding that “service providers in the sector are now to procure products and sell them in accordance with the indicative benchmark price to be published fortnight on the PPPRA website.”
According to the statement, “Petroleum products marketers are to note that no one will be paid subsidy on PMS discharges after 1st January 2012.”
PPPRA also assured of “adequate supply of quality products at prices that would be competitive and non-exploitative and so there should be no need for anyone to engage in panic buying or product hoarding.”
It stated that the agency, in conjunction with the Department of Petroleum Resources (DPR) would ensure that consumers were not taken advantage of in any form.
It also noted that the DPR would ensure that the interest of the consumers in terms of quality of products was guaranteed at all times and in line with international best practice. From the records of PPPRA, the landing cost of petrol at stations on December 29, 2011 was N134.22k. With a margin of N9.34k for the marketer, the cost to the consumer would be about N144.00.
Also, figures obtained from the PPRA’s table yesterday indicated that the Minimum Indicative Benchmark Depot Price will be N131.66, while the Maximum Indicative benchmark Open Market Price will be N141.00.
An investigation by The Guardian yesterday showed that some stations around the country had already started hoarding fuel in anticipation of the move, a strategy that threatened to cause artificial scarcity.
And reactions to the move were swift.
The Director-General, Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf, yesterday told The Guardian that the decision by the government to remove the fuel subsidy would help the development of the country in the medium- and long-terms.
But he said that the development would negatively affect every sector of the economy in the short run, as it would affect people’s purchasing power, cost of running business, inflation, “but in the end the country would begin to enjoy its benefits.”
He attributed the removal of fuel subsidy to the delay by government to deregulate the downstream sector. “In this kind of situation, subsidy removal is inevitable”, he added.
Also, the Chairman, Manufacturers Association of Nigeria (MAN), Rev. Isaac Agoye told The Guardian that he would only speak from the point of view of a cleric.
He urged the Federal Government to ensure that it cushioned the effect of subsidy removal on the poor masses and direct the funds to other aspects of the economy.
For former Secretary-General of the National Union of Petroleum and Natural Gas Workers (NUPENG) Frank Kokori, who felt disappointed by the move, the government was a “civilian dictatorship” planted in a democratic set up.
Kokori said that it was unfortunate that government had decided to go ahead with subsidy removal. “I don’t know what they see, may be they have strategies that will cushion its effects on the people, I don’t know. But it is sad that the government did not listen to the voice of the people, particularly the masses that will be largely affected,” he said.
The Executive Director, Operations, Fowobi Enterprises Limited, an independent petroleum-marketing firm, Gbenga Oguntayo, said that the Federal Government has to look at the common man and put palliative measures in place.
The removal of the fuel subsidy left many motorists stranded on most roads in Abuja yesterday as commercial vehicles effected a 200 per cent increase in the fares.
At the filling stations, confusion was the order of the day as arguments ensued between most motorists and station attendants as the markup in the pump price of petrol caused a major disagreement.
Mot filling stations within the Abuja metropolis have since adjusted their pump price to N140 per litre since yesterday morning even before the removal was officially announced.
The President General of Trade Union Congress (TUC), Peter Esele, told The Guardian yesterday on phone that the meeting and dialogue that government promised did not take place, saying what government embarked upon was monologue.
He said: “I heard about the increase a while ago but yet to confirm it. It is from you (The Guardian) that I am confirming it. I don’t know when the members of the Petroleum Products Pricing Regulatory Agency (PPPRA) met and took the decision on the removal of fuel subsidy. My deputy is a member of the PPPRA and he did not inform me of any meeting where this kind of decision was taken. I want to say that what government proposed were meetings with major stakeholders before the deregulation takes effect. But this step clearly demonstrates that what government did was pure monologue because there was no consultation with anybody.”
He also gave a glimpse of what will happen between today and tomorrow as he revealed that meetings will be conveyed immediately to consider the situation with a view to mapping out an appropriate response by labour to the move.
The Nigeria Labour Congress (NLC) blamed the economic challenges confronting Nigeria on the adoption of the policies of Bretton Woods institutions notably the International Monetary Fund (IMF) and World Bank by the Goodluck Jonathan administration.
Speaking via a statement issued to commemorate the New Year, Congress President, Abdulwahed Omar, the NLC said that it was shocked that government chose to romanticize antiquated policies that the rest of world was jettisoning.
It said: “The unfolding tragedy in our country today is that years after the world has discarded these ruinous policies and programmes of the World Bank and IMF, the Jonathan administration decided to embrace them as its abiding religion to the extent of employing and relying on their priests to run the entire economy. This is the fact behind the cuts in social spending, deliberate currency devaluation, deregulation, privatisation and attempts to astronomically increase electricity tariff and withdraw oil subsidy. It is this uncritical and subservient acceptance of the worn-out World Bank and IMF policies that is responsible for the on-going divorce of the Jonathan administration from the Nigerian people, and that has created the yawning gap with the populace which had largely supported the administration’s emergence.”
The statement titled ‘Role Up Your Sleeves In 2012,’ which signifies the hard road that lies ahead in 2012, the umbrella body of Nigerian workers described the out-gone year as one that witnessed unprecedented hyper inflation, job losses, insecurity, growing government intolerance and deepening poverty.
While decrying the overbearing influence of few Nigerians nationals who had worked for Bretton Wood institutions, the NLC said that the complete handover of the economy to this group of people to run the entire economy and determine the policy direction of government, left little initiatives to those elected to govern the country in the interest of Nigerians.
Expectedly, the planned removal of fuel subsidy by government featured prominently in the statement as the congress reiterated its opposition to the move.
The congress expressed worry about huge sums of money that was being expended on the fuel removal project, saying the country was losing enormous resources in the campaign.
It added: “Also, while government claims to be ‘consulting’ on the fuel subsidy removal, its commissioners of police in a number of states are boasting that they are armed and battle-ready to smash Nigerians who may publicly protest their feelings against the removal.”
While respecting the right of government to hold consultation with sections of Nigerians with a view to convincing them to endorse deregulation of the downstream sector, the congress challenged government to hold a referendum on the issue.
“Since the concept of ‘consultations’ is nebulous, and there are no objective criteria to determine its outcome, the NLC challenges the government to conduct a referendum on the issue to determine the WILL of the Nigerian people. If it does not, but rather elects to impose its will on the citizenry, the Nigerian people have the fundamental right to resist. Since the fuel subsidy removal is a war foretold, Nigerians must begin preparations to meet this challenge in the New Year. The NLC is working with other mass organisations in the country including professional bodies, pro-people civil society organizations, market associations and other sections of the populace to organise a peaceful and orderly resistance including rallies, strikes and mass protests. Congress asks the populace to support and attend the mass meetings, rallies and sensitisation campaigns which are on-going,” it said.
The congress, therefore, called on Nigerians to take on the challenges in their collective interest as the country marches on towards nationhood.
In a joint statement by Acting General Secretary, Nigeria Labour Congress (NLC) Owei Lakemfa and Trade Union Congress (TUC) Secretary General, John Kolawole, the two bodies threatened to embark on protests against the government’s decision .
They said that “This New Year ‘gift’ by the Presidency is callous, insensitive and is intended to cause anarchy in the country. It is tragic that the Jonathan Government has become the greatest source of insecurity in the country and the spring of danger to the Nigerian nation”.
They continued : “In the last few days, Jonathan’s administration had told Nigerians that it was consulting us on the issue of fuel subsidy removal and that if any was contemplated, it would be with effect from April 1, 2012. The NLC and TUC warned Nigerians that this government thrives on falsehood and can therefore not be trusted. The Presidency’s New Year Day action of removing the fuel subsidy and imposing new fuel prices on the populace is a clear demonstration of the fact that the Jonathan administration cannot be trusted. We also have information that it intends to make a litre of PMS N150.00 and then ask the NNPC to reduce the price at its fuel stations by a few Naira. Nigerians must defeat whatever are the schemes of this government…”
The groups added : “We also put the Jonathan Presidency and its surrogates on notice that we shall ensure that they are prosecuted up to the International Criminal Court if they, by acts of commission or omission, spill the blood of any Nigerian over the protests that follow their inhuman acts against the people.
“In the next few days, the leadership of the NLC and TUC will jointly issue directives on the date organized national strikes, street demonstrations and mass protests will commence. We shall neither surrender nor retreat.”
Pingback: Putting 2012 in perspective — Rokea Press